The Greek Referendum; Will It Matter?

Dennis Gartman has been directly involved in the capital markets since 1974 and has been publishing his daily commentary, The Gartman Letter, since 1987. Mr. Gartman is a strategic partner with the AdvisorShares Gartman Currency Hedged Gold ETFs (GEUR & GYEN) and lends his institutional insight to educate advisors and investors about trading gold in different currency terms.

We are unable to keep up with the changing landscape there in Europe and all we know for certain… or reasonably so… is that there will indeed be a referendum put before the Greek people this weekend wanting to know their preference as to whether Greece should remain wholly within the EUR zone and thus comply with the austerity demands put upon her by the Brussels Group, or whether Greece should pull up its monetary and political stakes, withdraw from the Euro-zone; default upon its debt obligations and take back the drachma.

Indeed, we are now totally confused because despite his seeming antagonism toward Greece and especially toward Prime Minister Tsipras we now see that German Finance Minister Schäuble said Tuesday that Greece would be able to remain in the euro even if Greek voters rejected the austerity program proposed by Tsipras in this week’s referendum. Mr. Schäuble then added that the ECB shall do what is necessary to protect the EUR if Greece’s voters rejected the terms of the referendum. Antje Tillmann, a lawmaker for Germany’s Christian Democratic Union, said further, that

Our goal remains to keep Greece in the euro, regardless of the referendum result…it’s up to Greece itself to decide whether it wants to stay in the euro zone.

We are certain, however, that if we tried hard enough this morning we could find… and in fact will find… some member of the German parliament or several such members who have said something entirely different. We know only that it is a long way through to the referendum and that things shall change perhaps dozens of times in the interim. Indeed, we know that Greek Prime Minister Tsipras has called upon the citizenry to vote “NO” in this weekend’s election, and a “NO” vote is a vote against austerity and a vote for separation of Greece from the Continent.

We’ve no idea how the referendum shall play itself out. We can imagine the “NO’s” carrying the day and we can imagine the “YES’s” doing the same. By tomorrow we should have a reasonably broad number of surveys taken by various polling groups there that should give us some information in which side shall prevail but at this point the first such polls show that the “NO” votes shall prevail and the “NO” vote is a vote in favour of default. The poll by the Efimerida Syntakton newspaper has 54% of those polled in favour of the “NO’s” with 33% in favor of the ‘YES” side of the question, with the remaining 13% still uncertain as to how they shall vote.

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